October 06, 2006

Cass Sunstein on "Libertarian Paternalism"

Student groups or the administration provide a speaker - and usually lunch - and a large percentage of our students use their lunch hours to come hear them. One of the most popular series of talks we offer is the Chicago's Best Ideas series. We started this series for our Centennial five years ago, and it was so popular, we've kept doing it. The speakers are our own faculty members, and they discuss ideas from their own work or Chicago's history that represent the best of what the Law School has to offer. Since last fall, we've been recording and podcasting these talks. On Tuesday, October 3, Cass Sunstein delivered the first CBI of the academic year. His title was "Nudge: The Gentle Power of Libertarian Paternalism." The room was packed, as usual for Professor Sunstein, and the discussion was lively. The topic was quintessential behavioral law and econ, and was quite interesting (even to those who aren't quite sure what "behavioral law and econ" is).

Here's Professor Sunstein's blurb about the talk: "The idea of libertarian paternalism might seem to be an oxymoron, but it is both possible and desirable for private and public institutions to influence behavior while also respecting freedom of choice. Often people's preferences are unclear and ill-formed, and their choices will inevitably be influenced by default rules, framing effects, and starting points. In these circumstances, a form of paternalism cannot be avoided. Equipped with an understanding of behavioral findings of bounded rationality and bounded self-control, libertarian paternalists should attempt to steer people's choices in welfare-promoting directions without eliminating freedom of choice. It is also possible to show how a libertarian paternalist might select among the possible options and to assess how much choice to offer. Examples are given from many areas, including savings behavior, labor law, and consumer protection."